MII orders carriers to dismantle local loops

China's Ministry of Information Industry (MII) has ordered fixed-line carriers to dismantle some of their wireless local-loop operations, raising concerns over the regulatory risks of the semi-mobile service.

In a recent notice, the MII criticised subsidiaries of China Telecoms Corp and China Netcom Corp Group for using 450-megahertz code division multiple access (CDMA 450) technology to operate Xiaolingtong city-wide wireless services without permission. It gave the companies a month to rectify the situation.

An MII spokesman said it had long been planning to clear up the 450MHz frequency. Last September, Li Haiqing, director of the MII's frequency planning division, said CDMA 450 was not a practical option for China due to the lack of available frequency.

Although only a few cities have rolled out services using CDMA 450, the regulator's crackdown has aroused speculation by market watchers it is tightening regulation of Xiaolingtong, which is eroding earnings of mobile carriers.

The move will ensure China United Telecommunications Corp remains the country's only CDMA network operator.

Beijing-based Norson Telecom Consulting client relations director Craig Watts said the MII's move to clear up CDMA 450 was a hint the watchdog would step up regulation of Xiaolingtong.